Analysis of Liabilities Of the South Carolina Second Injury Fund. Including

Transcription

1 Analysis of Liabilities Of the South Carolina Second Injury Fund Including Analysis of Current Liabilities Analysis of Future Liabilities, and Future Assessment Activity April 30, 2007 Prepared by Martin M. Simons ACAS, MAAA, FCA Public Actuarial Consultant P.O.BOX Columbia, SC 29260

2 EXECUTIVE SUMMARY Martin M. Simons was retained by The South Carolina Second Injury Fund to provide an actuarial estimate of the Fund s reimbursement liabilities as of June 30, 2007, and to present certain expectations relative to liabilities, assessments, and other criteria at significant dates - June 30, 2008, the last date of injury on acceptable claims; and June 30, These estimates include amounts payable and assessable by the Fund under the current laws of the State of South Carolina. Presented below is a table indicating the estimated assessment and year end estimated unfunded liability for each fiscal year from 2008 through Assessments on the table below are calculated under the current South Carolina statutes relating to Second Injury Fund assessments. Unfunded liabilities are defined as Second Injury Fund liabilities that exceed the amount of funds available at that point in time to satisfy those liabilities. Future South Carolina Second Injury Fund assessments and unfunded liabilities ( ) under current statutory assessment procedure Fiscal Assessment Unfunded Year Liabilities ,655, ,499, ,929, ,209, ,667, ,057, ,953, ,551, ,913, ,152, ,216, ,064, ,232,603 94,739, ,138,616 89,552, ,803,667 83,660, ,479,997 80,917, ,540,642 76,530, ,903,460 72,978, ,418,266 69,083, ,922,109 64,570, ,179,461 60,566, ,905,962 56,209, ,982,848 52,142, ,617,051 47,909, ,704,558 44,058, ,985,478 39,899, ,823,598 36,299, ,680,859 32,740, ,553,122 29,234, ,437,239 25,788, ,330,814 22,408, ,232,020 19,096, ,139,460 15,854, ,052,066 12,685, ,969,016 9,588, ,889,680 6,563, ,813,566 3,609, ,740, , ,669,

3 Under the current South Carolina statutory language, the estimated total liabilities at fiscal year end 2007 equal $392,918,199 (Ultimate claims excluding ultimate claims for fiscal year 2008 minus paid at 6/30/2007) and the estimated 2008 assessment based upon fiscal year 2007 estimated experience is $144,411,986. Since the Fund is expected to have a balance of $55,986,062 at 6/30/2007, the unfunded liability at that date equals $ 336,932,137. Three alternative assessment procedures are presented in this analysis. These alternatives provide assessment procedures that are designed to allow the Fund to collect enough funds to cease collecting additional assessments at three specific dates; June 30, 2014, June 30, 2016, and June 30, 2020 respectively. Exhibit 11 on page 23 provides details relating to these three alternative assessment procedures: Alternative 1: Under this alternative, the annual assessment amount is defined as the greater of the assessment under the current South Carolina statutes or $32, Under this scenario, it is estimated that the Fund will have obtained enough funds to account for all future claim payments at the end of fiscal year 2014 (at June 30, 2014). Alternative 2: Under this alternative, the annual assessment amount is defined as the greater of the assessment under the current South Carolina statutes or $22,000,000. Under this scenario, it is estimated that the Fund will have obtained enough funds to account for all future claim payments at the end of fiscal year 2016 (at June 30, 2016). Alternative 3: Under this alternative, the annual assessment amount is defined as the greater of the assessment under the current South Carolina statutes or $13,500,000. Under this scenario, it is estimated that the Fund will have obtained enough funds to account for all future claim payments at the end of fiscal year 2020 (at June 30, 2020). INTRODUCTION TO ANALYSIS This report fulfills all the requirements of the Actuarial Standards Board of the American Academy of Actuaries and other relevant criteria promulgated by actuarial bodies governing actuarial reports. Standard actuarial techniques have been used throughout this analysis. Actuarial judgment has been applied wherever necessary to model various aspects of the Fund s claim handling processes. An attempt has been made to disclose all such methods, databases, judgments, assumptions and techniques. This analysis is based upon claim reimbursement and financial information obtained from Second Injury Fund staff. The data provided to the author has not been audited, although anomalies or apparent anomalies have been discussed with Fund Staff The Fund s staff was helpful in explaining the probable reasons behind anomalies and apparent anomalies in the year-by-year results. The responses from the staff to specific questions relative to the claim reimbursement data were insightful and helpful in the completion of the steps necessary in arriving at the analysis results. Please note that a great deal of valuable information can be gleaned from an understanding of the process used in this analysis. Descriptions of current and future 3

4 Fund activities are an integral part of this analysis, and a review of these descriptions will provide valuable information relative to the future management of the Fund. In estimating the Fund s claim reimbursement liabilities, reasonable procedures and standard actuarial techniques and methodologies have been applied. Projected reimbursement liabilities are, by their very nature, subject to errors of estimation as ultimate liabilities are affected by events and conditions that have not yet occurred. It is assumed that historical loss patterns are generally good indicators of future loss payment patterns. Because of the limitation of the data supplied and the uncertainty of the statistical elements associated with forecasting, an actuary cannot guarantee that these estimates will prove to be adequate or not excessive. THE PROCESS A report was requested from the Second Injury Fund separating claim payments to indicate the amounts of claim reimbursement dollars paid during each fiscal year for claims that arose from accidents that occurred during each prior year. The report produced by the Fund is reproduced as Exhibits 1-A and 1-B of this report. Refer to Exhibit 1-A: The underlined number 13,280,458 found under the year 1994 in the fourth column indicates that claims totaling $13,280,458 were paid during fiscal year 1994 for accidents that occurred during The information on this exhibit is used to estimate future claim payments based upon the patterns of claim payments in the past. This actuarial technique is known as loss development. In this case, the factors are used to determine estimates of the Fund s future liabilities; for an insurance company, such an analysis would be referred to as a loss reserve analysis. The first step in the development process is to convert the information on Exhibits 1-A and 1-B into cumulative payments made during each fiscal year for claims that occurred in all prior years combined. The resulting cumulative claim payments (calculated directly from Exhibits 1-A and 1-B) are reproduced in Exhibits 2-A and 2-B. The incremental dollar differences from Exhibits 2-A and 2-B are then converted to decimal changes. Exhibits 3-A and 3-B present the incremental fiscal year pattern of claim payments for each accident year during the life of the claim. These are called loss development factors. The material from Exhibits 3-A and 3-B provides the basis for estimating future Fund claim payments from historical claim payment patterns. Exhibits 4-A and 4-B present loss development factors for each year during the life of the claims (that is, until no more will be paid in the future for that particular accident year). The factors used to produce estimates of the total amount of future Fund payments are determined at the bottom of these exhibits based upon an analysis of these historical loss development factors for each accident year. Exhibit 5 calculates estimates of the ultimate claims to be eventually paid by the Fund for each accident year. The estimates produced on Exhibit 5 assume that there will be no claims accepted by the South Carolina Second Injury Fund with accident dates after 6/30/

5 Exhibit 5 indicates that the Fund will eventually have paid $1,550,223,812 in total claim reimbursements for accidents that occurred in or subsequent to Exhibits 6-A and 6-B present the estimated cumulative claim payments for Second Injury Fund claims due to accidents that occurred from 1992 through According to this exhibit (see lower right entry on Exhibit 6-B) there will be 1,517,401,355 paid for all Fund claims at the end of fiscal year 2023 (at June 30, 2023). There will be $1,550,223,812 eventually paid for all claims that occurred in 1992 or later (from Exhibit 5) and there will be $1,517,401,355 paid on those same claims at the end of fiscal year 2023, leaving the difference of $32,822,457 still to be paid subsequent to Exhibit 7 includes the following additional assumptions as well as an estimate of the date when (under the current South Carolina statutes), the Fund will have paid all or nearly all of the claims for which it is legally obligated to pay. (1) Estimates are included to allow for additional payments the Fund will make that are related to accidents that occurred prior to These are long term claims. (2) It is assumed that the Fund will have the financial ability to close the Fund following fiscal year The relationship between the cumulative claim payments and the ultimate claims to be paid by the Fund may be seen on Chart 1 at the end of this analysis. A graphical depiction of the claim payments for each fiscal year may be seen on Chart 2 at the end of this analysis. The rightmost column on Exhibit 7 presents the estimated amount of future Fund Liabilities at the end of each fiscal year from 2008 through Exhibit 8, requested and received from the Fund staff, presents the historical annual assessments, expenses, reimbursements (claims paid), and year end Fund balances for fiscal years1997 and forward. This information is used to estimate future assessment needs and amounts. 5

6 ANALYSIS RESULTS Under the current South Carolina statutory language, the estimated total liabilities at fiscal year end 2007 equal $392,918,199 (Ultimate claims excluding ultimate claims for fiscal year 2008 minus paid at 6/30/2007) and the estimated 2008 assessment based upon fiscal year 2007 estimated experience is $144,411,986. Since the Fund is expected to have a balance of $55,986,062 at 6/30/2007, the unfunded liability at that date equals $ 336,932,137. The rightmost column on Exhibit 9 presents the estimated assessments that will be needed (based upon current South Carolina law) for each year from 2008 through Annual assessments produced above are used to estimate the amount of unfunded Fund liabilities for each fiscal year from 2008 through 2040 on Exhibit 10. A graphical depiction of these future estimated assessments and unfunded liabilities may be seen on Charts 3 and 4, respectively. Exhibit 11 presents three different alternatives for allowing the Fund to satisfy its claim payment responsibilities at the end of three separate time periods (with no subsequent assessments necessary), as follows: (1) If the annual assessment is defined as the greater of the assessment under the current law or $32,000,000, then the Fund will have sufficient funds to pay all future claims at the end of fiscal year (2) If the annual assessment is defined as the greater of the assessment under the current law or $22,000,000, then the Fund will have sufficient funds to pay all future claims at the end of fiscal year (3) If the annual assessment is defined as the greater of the assessment under the current law or $13,500,000, then the Fund will have sufficient funds to pay all future claims at the end of fiscal year

7 Analysis of Liabilities Of the South Carolina Second Injury Fund EXHIBITS Exhibit 1 (A and B) Accident year claim payments by fiscal year Exhibit 2 (A and B) Cumulative accident year claim payments by fiscal year Exhibit 3 (A and B) Historical development factors Exhibit 4 (A and B) Loss development factor selections Exhibit 5 Ultimate claims by accident year Exhibit 6-A Accident year cumulative claims by fiscal year ( ) Exhibit 6-B Accident year cumulative claims by fiscal year ( ) Exhibit 7 Claims paid, ult. claims and remaining liabilities ( ) Exhibit 8 Financial information Exhibit 9 Future financial information, including future assessments Exhibit 10 Unfunded liabilities ( ) Exhibit 11 Three alternative payouts 7

8 Exhibit 1-A South Carolina Fiscal Year Claims Paid by Accident Year PGRM: LCL617NP Second Injury Fund DOA YEAR ,949 4,408,081 13,280,458 12,197,098 7,563,360 5,195,363 2,036,905 1,388,964 1,166, ,412 4,115,816 14,450,680 15,655,189 8,623,091 4,698,217 1,728,692 1,258, ,454 5,041,699 13,846,978 14,457,920 10,372,773 4,165,829 1,921, ,586 5,332,348 15,701,863 15,265,457 7,993,534 5,161, ,061 5,935,342 14,682,360 15,934,872 9,774, ,386 6,637,974 17,877,590 17,293, ,352 7,586,852 19,420, ,480 7,861, , TOTAL 160,949 4,549,493 17,663,728 31,882,064 42,538,935 50,073,964 54,014,038 57,024,813 64,263,921 8

9 Exhibit 1-B South Carolina Fiscal Year Claims Paid by Accident Year Second Injury Fund PGRM: LCL617NP DOA * YEAR ,323 1,019, , , , ,835 28, ,350,132 1,253, , , , , , ,554,180 1,477,887 1,188, , , , , ,716,051 1,925,266 2,045,604 1,063,736 1,132,115 1,105, , ,109,217 4,026,521 3,185,276 1,326,029 1,769,388 1,685,630 1,417, ,073,359 7,482,336 5,963,295 2,585,868 2,168,533 2,505,009 1,521, ,604,366 18,451,957 10,718,010 6,701,017 6,463,689 4,452,399 3,716, ,355,706 28,599,896 16,698,584 11,387,748 11,501,698 7,893,333 4,834, ,928,794 26,146,039 29,863,524 21,860,083 21,031,413 12,804,665 9,146, ,870 9,245,467 30,115,171 36,233,945 35,101,289 22,282,917 13,880, ,903 8,244,051 26,753,347 44,750,758 34,775,170 24,874, ,898 6,057,020 38,142,125 45,759,733 35,292, ,686 2,078,017 9,311,292 9,415, ,773 1,541,059 6,301, , , ,000 TOTAL 79,582,998 99,975, ,170, ,515, ,463, ,523, ,013,170 *note: 2007 estimated from paid amounts through 3/7/2007 9

10 Exhibit 2-A South Carolina Cumulative Claims Paid by Accident Year source: Exhibit 1-A Second Injury Fund DOA YEAR ,949 4,569,030 17,849,488 30,046,586 37,609,946 42,805,308 44,842,213 46,231,177 47,397, ,412 4,257,228 18,707,909 34,363,098 42,986,189 47,684,406 49,413,098 50,671, ,454 5,309,153 19,156,130 33,614,050 43,986,823 48,152,652 50,074, ,586 5,524,933 21,226,797 36,492,254 44,485,788 49,647, ,061 6,076,402 20,758,763 36,693,635 46,468, ,386 6,798,360 24,675,950 41,969, ,352 7,907,203 27,327, ,480 8,209, , TOTAL 160,949 4,710,442 22,374,170 54,256,234 96,795, ,869, ,883, ,907, ,171,904 10

11 Exhibit 2-B South Carolina Cumulative Claims Paid by Accident Year source: Exhibit 1-B Second Injury Fund DOA YEAR ,145,841 49,165,053 49,667,031 49,828,242 49,968,042 50,109,877 50,138, ,021,931 53,275,540 53,795,880 54,447,545 54,961,376 55,372,593 55,659, ,628,537 53,106,424 54,294,969 54,996,176 55,566,708 56,412,941 56,983, ,363,792 55,289,057 57,334,662 58,398,397 59,530,512 60,636,473 61,540, ,577,836 56,604,357 59,789,632 61,115,662 62,885,049 64,570,679 65,988, ,042,828 61,525,164 67,488,459 70,074,327 72,242,859 74,747,868 76,269, ,931,589 66,383,546 77,101,556 83,802,574 90,266,262 94,718,662 98,435, ,565,301 62,165,196 78,863,781 90,251, ,753, ,646, ,480, ,334,377 34,480,416 64,343,940 86,204, ,235, ,040, ,186, ,870 9,388,337 39,503,508 75,737, ,838, ,121, ,001, ,903 8,590,954 35,344,301 80,095, ,870, ,744, ,898 6,182,918 44,325,043 90,084, ,377, ,686 2,110,703 11,421,995 20,837, ,773 1,641,832 7,943, , , TOTAL 401,754, ,729, ,900, ,415, ,879,792 1,037,403,775 1,150,393,945 11

12 Exhibit 3-A South Carolina Year to Year Historical Development Factors source: Exhibit 2-A Second Injury Fund DOA YEAR

13 Exhibit 3-B South Carolina Year to Year Historical Development Factors source: Exhibit 2-B Second Injury Fund DOA YEAR

14 South Carolina Loss Development Factor Selections source: Exhibit 3-A Second Injury Fund through 10 years 1 to 2 2 to 3 3 to 4 4 to 5 5 to 6 6 to 7 7 to 8 8 to 9 9 to 10 DOA- YEAR all ave year xhilo selection sel> ldf ldf>

15 Exhibit 4-B South Carolina Loss Development Factor Selections source: Exhibit 3-B Second Injury Fund 11 through 16 years 10 to to to to to 16 DOA- YEAR all ave year xhilo selection sel> ldf ldf>

16 Exhibit 5 South Carolina Second Injury Fund Ultimate Claims by Accident Year Acc yr Paid through Development Paid as of Ultimate 6/ to 16th Report 16th Report Paid for acc yrs 1992 forward 1992 $50,138, $50,138,030 $52,644, $55,659, $55,715,580 $58,501, $56,983, $57,269,811 $60,133, $61,540, $62,269,741 $65,383, $65,988, $67,484,978 $70,859, $76,269, $78,779,937 $82,718, $98,435, $103,489,367 $108,663, $114,480, $123,488,068 $129,662, $129,186, $143,531,299 $150,707, $147,001, $173,941,266 $182,638, $139,744, $181,889,392 $190,983, $125,377, $195,827,097 $205,618, $20,837, $43,918,514 $46,114, $7,943, $35,158,273 $36,916, $1,224, $37,943,546 $39,840, $23,000 1, $32,779,366 $34,418, $0 $32,779,366 $34,418,334 Total $1,150,834,096 $1,476,403,630 $1,550,223,812 NOTE: Ultimate claims for accident year 2008 are assumed to equal ultimate claims for accident year

17 Exhibit 6-A Accident Year South Carolina Cumulative Claims by Fiscal Year Second Injury Fund Accident YEAR ,288,030 50,438,030 50,588,030 50,738,030 50,888,030 51,038,030 51,188,030 51,338, ,858,192 56,025,192 56,192,192 56,359,192 56,526,192 56,693,192 56,860,192 57,027, ,383,935 57,612,655 57,783,992 57,955,328 58,126,664 58,298,001 58,469,337 58,640, ,145,141 62,580,871 62,802,326 62,988,621 63,174,916 63,361,211 63,547,506 63,733, ,896,237 67,553,213 68,026,253 68,266,370 68,468,267 68,670,165 68,872,062 69,073, ,268,100 78,330,871 79,099,426 79,652,601 79,933,041 80,168,730 80,404,419 80,640, ,501, ,816, ,215, ,227, ,955, ,323, ,633, ,943, ,826, ,298, ,871, ,545, ,755, ,625, ,065, ,434, ,491, ,391, ,272, ,104, ,055, ,464, ,478, ,989, ,077, ,310, ,050, ,552, ,778, ,147, ,859, ,089, ,263, ,834, ,323, ,296, ,884, ,163, ,647, ,414, ,038, ,728, ,151, ,081, ,453, ,420, ,940, ,624, ,095,817 35,046,373 38,682,403 41,328,152 42,699,389 43,940,966 44,856,551 45,436, ,356,662 21,450,945 25,846,318 28,536,134 30,496,167 31,516,237 32,440,843 33,124, ,236,923 12,088,409 16,916,406 20,413,205 22,568,043 24,148,483 24,986,454 25,749, ,133,067 5,763,404 11,163,803 15,615,754 18,836,972 20,818,737 22,270,022 23,036, ,133,067 5,763,404 11,163,803 15,615,754 18,836,972 20,818,737 22,270,022 Total 1,235,860,288 1,301,401,956 1,353,749,580 1,392,824,716 1,422,215,779 1,443,637,028 1,459,338,665 1,471,567,391 17

18 Exhibit 6-B Accident Year South Carolina Cumulative Claims by Fiscal Year Second Injury Fund Accident YEAR ,488,030 51,638,030 51,788,030 51,938,030 52,088,030 52,238,030 52,388,030 52,538, ,194,192 57,361,192 57,528,192 57,695,192 57,862,192 58,029,192 58,196,192 58,363, ,812,010 58,983,347 59,154,683 59,326,020 59,497,356 59,668,692 59,840,029 60,011, ,920,096 64,106,391 64,292,686 64,478,981 64,665,276 64,851,570 65,037,865 65,224, ,275,858 69,477,755 69,679,653 69,881,550 70,083,448 70,285,345 70,487,243 70,689, ,875,798 81,111,487 81,347,176 81,582,865 81,818,554 82,054,243 82,289,933 82,525, ,252, ,562, ,871, ,181, ,491, ,800, ,110, ,419, ,804, ,173, ,543, ,912, ,281, ,651, ,020, ,390, ,419, ,848, ,277, ,707, ,136, ,566, ,995, ,425, ,340, ,860, ,380, ,901, ,421, ,941, ,462, ,982, ,679, ,328, ,872, ,416, ,960, ,504, ,049, ,593, ,561, ,952, ,651, ,237, ,823, ,409, ,994, ,580, ,054,257 46,498,945 46,816,974 46,974,670 47,106,062 47,237,455 47,368,848 47,500, ,561,417 34,025,845 34,362,499 34,605,606 34,710,790 34,815,975 34,921,159 35,026, ,322,677 26,699,421 27,098,730 27,396,593 27,620,074 27,733,591 27,847,108 27,960, ,733,199 24,254,820 24,595,436 24,956,774 25,224,616 25,423,929 25,536,280 25,634, ,036,190 23,733,199 24,254,820 24,595,436 24,956,774 25,224,616 25,423,929 25,536,280 Total 1,480,330,198 1,487,615,676 1,493,516,468 1,498,788,190 1,503,748,529 1,508,436,880 1,512,969,740 1,517,401,355 18

19 Exhibit 7 Second Injury Fund Claims Paid by Fiscal Year Fiscal Year Claims Paid Claims Paid* Total Claims Cumulative Ultimate Paid Ultimate Paid Remaining 1992 & after < 1992 Paid in year Paid inc Excluding * incl.pre-1992 Liability ,466, ,000 85,866,343 1,236,260,288 1,575,785,629 1,578,170, ,910, ,541, ,000 65,891,668 1,301,751,956 1,575,785,629 1,578,170, ,418, ,347, ,000 52,657,624 1,354,059,580 1,575,785,629 1,578,170, ,111, ,075, ,000 39,355,136 1,393,104,716 1,575,785,629 1,578,170, ,065, ,391, ,000 29,631,063 1,422,455,779 1,575,785,629 1,578,170, ,714, ,421, ,000 21,621,249 1,443,837,028 1,575,785,629 1,578,170, ,333, ,701, ,000 15,861,637 1,459,498,665 1,575,785,629 1,578,170, ,671, ,228, ,000 12,358,726 1,471,697,391 1,575,785,629 1,578,170, ,473, ,762, ,000 8,872,807 1,480,330,198 1,575,785,629 1,578,170,629 97,840, ,285,477 90,000 7,375,477 1,487,615,676 1,575,785,629 1,578,170,629 90,554, ,900,793 60,000 5,960,793 1,493,516,468 1,575,785,629 1,578,170,629 84,654, ,271,721 30,000 5,301,721 1,498,788,190 1,575,785,629 1,578,170,629 79,382, ,960,339 15,000 4,975,339 1,503,748,529 1,575,785,629 1,578,170,629 74,422, ,688,351 10,000 4,698,351 1,508,436,880 1,575,785,629 1,578,170,629 69,733, ,532,860 4,532,860 1,512,969,740 1,575,785,629 1,578,170,629 65,200, ,431,615 4,431,615 1,517,401,355 1,575,785,629 1,578,170,629 60,769, ,320,824 4,320,824 1,521,722,179 1,575,785,629 1,578,170,629 56,448, ,212,804 4,212,804 1,525,934,982 1,575,785,629 1,578,170,629 52,235, ,107,484 4,107,484 1,530,042,466 1,575,785,629 1,578,170,629 48,128, ,004,796 4,004,796 1,534,047,262 1,575,785,629 1,578,170,629 44,123, ,904,677 3,904,677 1,537,951,939 1,575,785,629 1,578,170,629 40,218, ,807,060 3,807,060 1,541,758,999 1,575,785,629 1,578,170,629 36,411, ,711,883 3,711,883 1,545,470,882 1,575,785,629 1,578,170,629 32,699, ,619,086 3,619,086 1,549,089,968 1,575,785,629 1,578,170,629 29,080, ,528,609 3,528,609 1,552,618,577 1,575,785,629 1,578,170,629 25,552, ,440,394 3,440,394 1,556,058,970 1,575,785,629 1,578,170,629 22,111, ,354,384 3,354,384 1,559,413,354 1,575,785,629 1,578,170,629 18,757, ,270,524 3,270,524 1,562,683,878 1,575,785,629 1,578,170,629 15,486, ,188,761 3,188,761 1,565,872,639 1,575,785,629 1,578,170,629 12,297, ,109,042 3,109,042 1,568,981,682 1,575,785,629 1,578,170,629 9,188, ,031,316 3,031,316 1,572,012,998 1,575,785,629 1,578,170,629 6,157, ,955,533 2,955,533 1,574,968,531 1,575,785,629 1,578,170,629 3,202, ,881,645 2,881,645 1,577,850,176 1,575,785,629 1,578,170, ,453 19

20 Exhibit 8 South Carolina Second Injury Fund Financial Information source: SIF Fiscal Year Assessment Expenses Reimbursements Invest Income Balance ,434,856 1,224,156 58,154,248 3,351,536 41,524, ,786,719 1,230,002 59,317,656 4,189,711 48,171, ,570,312 1,275,961 62,748,149 4,044,044 45,471, ,184,571 1,327,899 67,167,003 3,985,591 47,681, ,205,113 1,426,380 81,144,779 4,326,042 41,294, ,170,367 1,442, ,810,790 3,039,086 39,522, ,346,631 1,587, ,146,547 3,762,647 63,938, ,584,449 1,571, ,616,089 4,490,321 79,243, ,313,526 1,631, ,947,142 3,641,605 41,706, ,237,836 1,582, ,638,623 3,374,400 72,661, * 1,500, ,013,170 3,600,000 55,986,062 * 2007 fiscal year values estimated from information through 3/07/

21 Exhibit 9 South Carolina Second Injury Fund Future financial Information Fiscal Funds at Claims Expenses Investment Assessment Balance Assessment year Beginning Paid Income Received at year end ,986,062 $85,866,343 $1,600,000 $3,478, ,411, ,410,671 36,655, ,410,671 $65,891,668 $1,616,000 $2,650,377 36,655,429 88,208,809 29,929, ,208,809 $52,657,624 $1,468,944 $2,041,716 29,929,610 66,053,566 28,667, ,053,566 $39,355,136 $1,483,633 $1,631,663 28,667,928 55,514,388 15,953, ,514,388 $29,631,063 $1,498,470 $1,224,464 15,953,458 41,562,777 12,913, ,562,777 $21,621,249 $1,513,454 $926,856 12,913,905 32,268,835 8,216, ,268,835 $15,861,637 $1,375,730 $684,425 8,216,897 23,932,790 6,232, ,932,790 $12,358,726 $1,389,487 $503,578 6,232,603 16,920,757 7,138, ,920,757 $8,872,807 $1,403,382 $396,480 7,138,616 14,179,664 3,803, ,179,664 $7,375,477 $1,263,044 $292,605 3,803,667 9,637,415 5,479, ,637,415 $5,960,793 $1,275,675 $242,230 5,479,997 8,123,176 4,540, ,123,176 $5,301,721 $1,159,588 $201,324 4,540,642 6,403,832 4,903, ,403,832 $4,975,339 $1,171,184 $177,382 4,903,460 5,338,150 5,418, ,338,150 $4,698,351 $1,064,606 $169,607 5,418,266 5,163,066 4,922, ,163,066 $4,532,860 $1,075,252 $157,674 4,922,109 4,634,736 5,179, ,634,736 $4,431,615 $977,404 $154,644 5,179,461 4,559,822 4,905, ,559,822 $4,320,824 $987,178 $148,376 4,905,962 4,306,156 4,982, ,306,156 $4,212,804 $897,345 $146,854 4,982,848 4,325,710 4,617, ,325,710 $4,107,484 $906,319 $140,638 4,617,051 4,069,596 4,704, ,069,596 $4,004,796 $686,536 $141,533 4,704,558 4,224,354 3,985, ,224,354 $3,904,677 $520,051 $134,571 3,985,478 3,919,676 3,823, ,919,676 $3,807,060 $393,939 $128,613 3,823,598 3,670,889 3,680, ,670,889 $3,711,883 $298,409 $123,433 3,680,859 3,464,889 3,553, ,464,889 $3,619,086 $226,045 $118,859 3,553,122 3,291,739 3,437, ,291,739 $3,528,609 $171,229 $114,761 3,437,239 3,143,902 3,330, ,143,902 $3,440,394 $129,706 $111,038 3,330,814 3,015,654 3,232, ,015,654 $3,354,384 $98,252 $107,615 3,232,020 2,902,653 3,139, ,902,653 $3,270,524 $74,426 $104,435 3,139,460 2,801,597 3,052, ,801,597 $3,188,761 $56,378 $101,452 3,052,066 2,709,977 2,969, ,709,977 $3,109,042 $42,706 $98,635 2,969,016 2,625,880 2,889, ,625,880 $3,031,316 $32,350 $95,956 2,889,680 2,547,850 2,813, ,547,850 $2,955,533 $24,505 $93,396 2,813,566 2,474,773 2,740, ,474,773 $2,881,645 $18,563 $90,939 2,740,294 2,405,798 2,669,565 21

22 Fiscal Remaining Ending Assessment Unfunded Year Liability Balance Liability Exhibit ,910, ,410,671 36,655, ,499,670 South Carolina ,418,673 85,359,809 32,778, ,058,864 Second Injury Fund ,111,049 66,053,566 28,667, ,057, ,065,913 55,514,388 15,953, ,551, ,714,850 41,562,777 12,913, ,152, ,333,601 32,268,835 8,216, ,064, ,671,964 23,932,790 6,232,603 94,739, ,473,238 16,920,757 7,138,616 89,552, ,840,431 14,179,664 3,803,667 83,660, ,554,953 9,637,415 5,479,997 80,917, ,654,161 8,123,176 4,540,642 76,530, ,382,439 6,403,832 4,903,460 72,978, ,422,100 5,338,150 5,418,266 69,083, ,733,749 5,163,066 4,922,109 64,570, ,200,889 4,634,736 5,179,461 60,566, ,769,274 4,559,822 4,905,962 56,209, ,448,450 4,306,156 4,982,848 52,142, ,235,647 4,325,710 4,617,051 47,909, ,128,163 4,069,596 4,704,558 44,058, ,123,367 4,224,354 3,985,478 39,899, ,218,690 3,919,676 3,823,598 36,299, ,411,630 3,670,889 3,680,859 32,740, ,699,747 3,464,889 3,553,122 29,234, ,080,661 3,291,739 3,437,239 25,788, ,552,052 3,143,902 3,330,814 22,408, ,111,659 3,015,654 3,232,020 19,096, ,757,275 2,902,653 3,139,460 15,854, ,486,751 2,801,597 3,052,066 12,685, ,297,990 2,709,977 2,969,016 9,588, ,188,947 2,625,880 2,889,680 6,563, ,157,631 2,547,850 2,813,566 3,609, ,202,098 2,474,773 2,740, , ,453 2,405,798 2,669,565 22

23 Exhibit 11 Future Assessments - Three Alternative Payouts South Carolina Second Injury Fund Fiscal Unfunded alternative 1 alternative 2 alternative 3 Year Liability assessment cumulative assessment cumulative assessment cumulative excess* excess* excess* ,499,670 36,655, ,655, ,655, ,209,864 32,000,000 2,101,217 29,929, ,929, ,057,483 32,000,000 5,545,937 28,667, ,667, ,551,525 32,000,000 21,997,776 22,000,000 6,136,569 15,953, ,152,073 32,000,000 42,027,980 22,000,000 15,542,046 13,500, , ,064,766 32,000,000 67,426,033 22,000,000 29,996,629 13,500,000 5,974, ,739,174 32,000,000 95,599,866 22,000,000 46,898,689 13,500,000 13,529, ,552,480 22,000,000 63,388,306 13,500,000 20,391, ,660,766 22,000,000 83,757,216 13,500,000 30,843, ,917,538 13,500,000 39,908, ,530,985 13,500,000 50,198, ,978,608 13,500,000 60,428, ,083,950 13,500,000 70,443,835 note: (1) When cumulative excess equals unfunded liability, then future assessments will not be needed. (2) Calculations on this exhibit include additional investment income that will be earned on excess funds. *The calculations assume an investment yield of 3.0% on excess funds held. 23

24 Analysis of Liabilities of the South Carolina Second Injury Fund CHARTS Chart 1 Chart 2 Chart 3 Chart 4 Paid to Ultimate Claims Paid Unfunded liabilities (current law) Assessments (current law) 24

25 1,600,000,000 1,550,000,000 1,500,000,000 1,450,000,000 Chart 1 1,400,000,000 1,350,000,000 Cumulative Paid Ultimate Paid 1,300,000,000 1,250,000,000 1,200,000,

26 90,000,000 80,000,000 Chart 2 Claims Paid 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,

27 ,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000 0 Chart 3 Assessments ( ) (current law)

28 ,000, ,000, ,000, ,000,000 50,000,000 0 Chart 4 South Carolina Second Injury Fund Unfunded Liability (current law)